NBN relents, not completely

The company building Labor’s national broadband network has dropped a surprise demand that service providers would not be able to blame it immediately if customers suffer faults, but has defied calls to scrap its controversial pricing model.

Documents released by NBN Co yesterday show it had asked the internet service providers that will buy its services and sell them onto consumers and businesses to sign clauses “restricting criticism of NBN Co and its operations".

However, it has dropped the demand and admitted it was “in­appropriate" after complaints by ISPs, who have been briefed this week on the final terms and conditions they will be required to sign up to in order to use NBN Co’s services.

“It is a difficult concept to establish," said an NBN spokeswoman. “People can say what they want so we can address things as quickly as we can. There is probably no point trying to build it into contracts, it’s better to work through issues together."

Industry experts say the change highlights the potential for blame-shifting between ISPs and NBN Co when customers using ISPs’ services over the fibre-optic network suffer poor service or faults.

The climb down was one of a series made by NBN Co in its final terms and conditions. It has signed up 19 ISPs in its trial sites and will launch commercial services in October.

The terms and conditions could be changed again if NBN Co voluntarily changes, or is forced by the regulator to change, its delayed special access undertaking.

This will spell out how it expects to be regulated over the next 30 years while setting out how it plans to achieve the 7 per cent internal rate of return in its corporate plan.

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In a discussion paper on the special access undertaking released yesterday NBN Co stuck by its prices, including a basic access offer of $24 a month.

It also promised to hold prices for five years and then reduce them in real terms by limiting any increases to half the CPI rate.

But it ignored industry calls, led by Internode founder
Simon Hackett
, to drop its controversial plans for an additional usage-based fee to carry aggregated traffic from groups of customers over the network.

Mr Hackett has argued these charges will rise to unreasonably high levels as usage of the network increases and will make it impossible for smaller ISPs to buy direct from NBN Co if they wish to provide a national service.

NBN Co expects it will take six to 12 months for regulatory approval once it submits a final undertaking.